Dead in the Water: The breakdown in Renaissance Dam Negotiations

2 May 2018

After more than seven years, negotiations over the Renaissance Dam have stalled. Egyptian Foreign Minister Sameh Shoukry has indicated that talks have simply become unproductive, whilst Ethiopia blames Cairo’s attachment to colonial-era water rights and Sudan continues to walk a tightrope between supporting the dam and upholding Egypt’s interests.

With such varied positions, what risks does a freeze in negotiations present, and what options exist to reach a just settlement accepted by all sides in this crisis?

Negotiation phases and philosophies

Negotiations have passed through three distinct stages: the tri-lateral committee (May 2011), the road map (September 2014) and the agreement on the declaration of principles (March 2015). The aim of talks was to agree on a formula regarding the technical specifications, economic feasibility and social and environmental impacts of the dam.

The three countries chose to pursue direct talks without external mediators, whilst retaining contradictory visions and negotiation philosophies. Ethiopia based its approach on the premise that the Nile is “trans-national”; and therefore that it enjoys sovereign rights over the river and the dam should be considered a strategic asset built according to its own specifications. Sudan has a similar vision to that of Ethiopia, while Egypt considers the Nile to be an “international river” governed by the rules of shared ownership, which oblige Addis Ababa to ensure Cairo’s water rights.

All those countries hosting sources of the Nile – except Eretria – affirm Ethiopia’s right to benefit from the river for agriculture and power generation without undermining the interests of the countries to which the Nile flows. They view the dam as a means to support development in the Nile basin. Indeed, Kenya, Tanzania, Rwanda, Burundi, Sudan and Djibouti have all signed agreements to import electricity from Ethiopia, and Yemen may also do so in the future.

Ethiopian negotiators were keen to take the initiative and stress their country’s right to begin development and associated manufacturing while also attracting foreign investment, all without damaging the interests of their partners on the Nile. This was confirmed by the signing of an agreement on the declaration of principles in March 2015, in which Addis Ababa committed itself to respecting the outcomes of studies to be carried out by two French firms on the economic, social and environmental impacts of the dam. Ethiopia also pledged to coordinate with Egypt and Sudan on the initial filling of the reservoir and its rules of operation, and to provide proper compensation for any affected parties in case of a significant incident.

Egyptian negotiators sought to show good faith and build confidence in Ethiopia by affirming that Cairo had no objection to the construction of the dam; however, they urged Addis Ababa to modify the dam’s specifications, limiting itsreservoir from 74 billion cubic meters to 14.5 billion cubic meters, extending the filling period from 3 to 7 years and increasing the number of spillways to guarantee the flow of water to Egypt.

Sudanese negotiators sought to maintain balance in the negotiations, their aim being to reap the benefits of the dam whilst ensuring Egypt’s interests; the dam would lessen the danger of floods, prolong the hypothetical life span of their own Roseires dam, and fill 40 percent of the gap in Sudan’s energy supplies.

Outcomes and potential consequences

Talks have failed to reach agreement on the dam’s rules of operation, the volume and period of water storage, or the timing of the first fill. While Egypt accepted the preliminary reports prepared by the two French firms in November 2017 on the economic, social and environmental impacts of the dam, Ethiopia and Sudan expressed reservations. Therefore, Cairo called for the mediation of the World Bank, which Ethiopia subsequently rejected in favor of continued direct talks without mediation.

This only added to Egyptian fears regarding the future of negotiations, already growing in view of 1) their postponement between the resignation of Ethiopia’s Prime Minister in February 2018 and the appointment of his successor, Abiy Ahmed Ali in late March; 2) persistent reports indicating that the construction of the dam would be 70% complete by April 2018; and 3) growing tension in Egyptian–Sudanese relations as a result of the Hala'ib Triangle disputeand other controversial issues, despite persistent efforts by both parties to bring relations back on track.

A full breakdown in negotiations carries significant consequences. Egypt’s water policy will clearly suffer, given its central objective of maintaining a dependable year-round flow of water to the country, the absence of which has the potential to trigger public disorder and conflict over water resource allocation priorities. Meanwhile, the deterioration of Egypt’s relations with upstream states may limit future cooperation and increase Cairo’s isolation in the Nile Basin.

Ethiopia, on the other hand, will gain an opportunity to use water politics to build political leverage and influence in the Nile Basin, akin to that which it enjoys in the Horn of Africa.

Settlement options

With negotiations in deadlock and the scheduled test date for the dam approaching, there is a need to establish new initiatives and avenues of negotiation to reach a compromise among the parties. In parallel with this effort, negotiations may be raised from ministerial level to that of heads of state and government. Potential approaches may include the following:

The parties approve a comprehensive political initiative based on an “Energy for Food” principle, wherein Ethiopia reserves the right to increase energy production on the condition that it ensures Egypt’s annual share of 55.5 billion cubic meters of Nile River water.

Egypt offers the Ethiopian government incentives to change the current specifications of the dam. These may include contributing funds for the dam project, purchasing electricity it produces, or exporting LNG supplies to Ethiopia.

Ethiopia makes up for its plan to proceed using the dam’s current specifications by supporting Egypt’s demands for the initiation of watershed projects in Southern Sudan. It is worth noting here that Egypt already faces a water deficit, which has prompted the government to limit water-intensive crops in cultivated areas – particularly rice and sugar cane.

Global and regional actors engage in mediatory efforts – notably Saudi Arabia, the UAE and Kuwait, given their special trade and investment relations with Ethiopia. Global actors can include France and Germany that adhere to international law and favor cooperative options in resolving global trans-boundarydisputes.

The continuing impasse in negotiations does not exclude the possibility of a peaceful settlement. Decision-makers in the concerned countries will ultimately need to adopt rational positions, particularly given that global powers are unlikely to allow the situation to deteriorate further in the Nile Basin.

Nonetheless, while failure to resolve this dispute would negatively affect security and investment across the region, the possibility of resorting to coercive measures such as military action – often raised by mass media – offers no panacea.

Given that resorting to legal mechanisms may not be a viable option to resolve the conflict – owing to the fact that the declaration of principles agreement does not provide for arbitration or access to international justice to resolve the dispute – a comprehensive political settlement brokered by regional and global actors is the most likely outcome, based on a combination of compromise, mutual concessions and compensation.

After all, the costs associated with this option would be far less than those of direct military confrontation between Egypt and Ethiopia.